An associate of former Mongolian president Nambar Enkhbayar who was jailed along with him for corruption earlier this month may have funnelled government funds at the centre of the court case through two Hong Kong companies.
The associate, Jambal Myagmarjargal, is the sole director of the two companies.
Mongolia's anti-corruption force alleges that Enkhbayar ordered Edernet, a prominent Mongolian state copper manufacturer, to enter into purchase contracts in 2005 and 2006 with Myagmarjargal. Mongolian investigators believe Myagmarjargal, a driver and a relative of Enkhbayar's wife, had no means to supply steel as demanded by the contracts.
A statement from the Mongolian Independent Authority Against Corruption said the contracts pushed through the Erdenet factory involved US$3.5 million in state funds - some of which investigators believe may have been moved through the accounts of the Hong Kong companies, Henlon and Great Global International, raising the prospect that they were used to launder the money.
Enkhbayar, who served as prime minister and then president for a decade until 2009, told the court the charges against him were 'groundless'. He claims the case was politically motivated and remains in jail pending an appeal against his four-year jail term.
The former president has been ordered to forfeit cash and property valued at US$1 million.
With Mongolia holding no formal law enforcement or legal assistance relationships with Hong Kong, the prosecution did not involve local government or police assistance. The Mongolian consulate in Hong Kong has yet to comment on the case, or possible future efforts to seek investigative assistance.